Thanks for your suggestion Tom Mc. Unfortunately I'm using Windows7.
I went back to the solution I mentioned in my question - to look amongst the "Services" via MSCONFIG. I trawled through and saw the service for "encrypted file system". I disabled it. I continued on and saw another service dealing with "keyrings" called "IKe and Auth IPSec Keyring Module" - and knowing that keyrings are used in PGP, I disabled that service too.
I rebooted the computer, and when Win7 started it came up with PGP and I was able to configure it to run! WOW!
Now I have no idea which of the two services was the culprit - first enabling one of the services. When PGP ran I disabled the first service and enabled the second. PGP still loaded. I then enabled both - and PGP worked!
The solution was to disable both forementioned service and reenable them after installation.
It might be that one of the two was the culprit - but I don't care. I've got it working.......